It can seem that home values in Kitchener and Waterloo have a range of discrepancies. As you prepare to sell your home, though, you may be wondering why some (similar) homes in Waterloo Region assess for so much more than their actual list price. What accounts for these strange differences? We put together an overview with our explanation. We hope this article will answer your questions about “assessed home value” versus a home’s “list price.”
Your Home’s Assessed Value
The assessed value figures are almost exclusively reserved for determining property taxes on a home. It is what the city, town, or municipality thinks the property is worth. This translates into how much property tax you pay. Assessments occur on specific dates, and while they can certainly occur on an annual basis, they are usually conducted in three-year cycles, as they can be fairly costly to conduct. There are some areas where assessed value equals the market value of the home, but this is not the typical case. Instead, the market value is usually multiplied by an assessment rate, and then the home’s value is calculated from there. The city, town, or municipality uses these numbers to look at exactly what the property tax rate should be throughout the region. The combined values of all of the homes are examined to determine a specific rate; therefore if you live in an area with reasonably valuable properties, you may pay a higher tax rate, even if your home is an older one. Homeowners can, however, appeal an assessed value if they find it to be completely off base. In most cases you would need to have documentation prepared to back up the fact that you believe your assessment is off base. A certified appraiser could help you provide reliable documentation, and it is possible to change your original appraisal should it become necessary for arguing your case for the discrepancy of your property taxes
Property taxes help to pay for the homeowner’s share of various functions of the city including road paving and maintenance, streetlights, and schools. They also pay for the salaries of municipal workers in the area. There are differing factors besides your home’s actual value, which may affect that rate. A property’s location can influence the rate, as may the size of your property and any outbuildings you happen to have located on your land. Other factors that can influence your property tax rate include the type of house construction and the overall age of your property. Older homes, for instance, tend to be subject to cheaper property tax rates.
In the event you would like to appeal your assessment value or tax classification of your property taxes in Kitchener or Waterloo, you will need to contact the assessor’s office to learn more about the application process and how you can appeal or apply for an exemption. There is a do-it-yourself process you can follow – you can find out more information about it here.
Your Home’s List Price
The list price of a home is literally what the sellers (together with the help of a qualified agent) feel they can reasonably market the home for. While the list price is often determined by a real estate professional, in some cases it is based on the appraisal value. The appraiser examines the details involved with the property as well as the prices comparable properties have recently sold for on the market. By combining this data, an appraiser is able to determine the price that will help move the property quickly, while still providing maximum value for the homeowner. The appraised figure tends to be most affected by both time and market activity.
Does “Assessed Value” and “List Price” Determine What Your Kitchener-Waterloo Home is Worth?
On some level, they do both give a hint as to the value of the home. The problem, though, is that because assessments fail to keep up with the market, a home that once was assessed at $250,000 and is taxed based on that number may be worth just $150,000 due to a market crash, and that’s a real problem for homeowners who have to pay based on the assessed value of the home. While the numbers do sometimes match, that is a more rare scenario than a difference in the two prices.
If You’re Ready to Sell Your Home
When you’re ready to sell your home, contacting a qualified real estate agent or team is the best way to set the sale price. It’s a good idea to go into it with a solid sense of your home’s value, and real estate professionals have the knowledge of the current market necessary to help get a house listed and sold as soon as possible. Simply grabbing the assessed value and sticking a “For Sale By Owner” sign on your lawn probably isn’t going to get you very far.
If you would like a FREE Market Evaluation of your home or you would like to learn more about the process of selling your house in Kitchener Ontario, please contact The Mark Maurer Team today.